Hopefully failing a breathalyzer test doesn't happen to any mortgage bankers
tonight
after Happy Hour: ItsNotABottle
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1107786104887&s=8721&e=001lAgH-b
-376LamRe0KGXJ37_UXdexNq2lMbxg-qkxBOWmFNq4pnLOG9Q9pR2G7YdPN-qPZywK11F1D7VyF0
U_WXZThgOfAWNJp_JwdxHOnRUI63CiXKWrCopJKGCDpIo-1QkNnPPvDuMesw73Yzhv-A==].
Folks who are hedging a pipeline, or who have vocal borrowers they locked in
earlier
this week, or who own any stocks, could probably use a decent Happy Hour
later today.
Operation Twist is not the issue causing the volatility. The surprise
earlier this
week is that the Fed will also start reinvesting maturing cash flows from
existing
mortgage holdings back into mortgages (it was buying Treasuries), as it
seeks to
support housing. And stocks were hit, since the FOMC's language on the
outlook
of our economy was also downgraded, as the Fed said there are "significant
downside
risks to the economic outlook, including strains in global financial
markets." An
MBS trader wrote, "Originators are moving rate sheets lower into this move
but as
locks start pouring in, primary secondary spreads are bound to widen on
capacity
constraints."
In my talks around the country, it seems that mortgage bankers care less
about lower
rates at this point, and more about the credit pendulum swinging back to
"normal"
or "makes sense." As one mortgage research person stated, "So the next step
is 'Refi.gov.'
It's highly likely that this fed action is the first of a few steps - the
most
likely outcome is a 125-150% LTV program." As I mentioned to the New England
Mortgage
Banker's group yesterday in Rhode Island, it makes all the sense in the
world to
take borrowers who have a history of making their payments and (wanting to
make
their payments), and let them refinance regardless of LTV. And if the Fed
wants
refinancing to put money in consumers' hands (at the expense of MBS
holders, of
course), then why not take this step?
(Of course one of the issues with this is that about 19% of borrowers who
owned
a home in 2007 no longer qualify for a mortgage based on payment history
alone,
according to 9/20 testimony from Laurie S. Goodman, a Senior Managing
Director at
Amherst Securities Group: SenateBankingCommittee
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1107786104887&s=8721&e=001lAgH-b
-376KSkYbKBMw1wSRyX3_9uuqpki2OWitKArVLmTViQC6296LnyPsy16tVdp7Wkld84kl5OdaFQ-
a5HfDD50uRj97S7kd2mxOpc95aZ57buNr895aEJtYBjndrMjJVOghhM-Sk-dr3a6M9Ig==].
And while they're at it how about this, which I received from a politically
active
loan broker: "Let's call for the FHA to allow the use of the current MIP in
place
on a mortgage on all Streamline refinances. I just calculated out a
Streamline on
a $560k borrower moving his rate from 4.625 to 3.75% when you net affect his
MIP
from the old to the new his payment only drops about $90 per month. So in
retrospect,
the increased MIP is actually harming the FHA system by preventing borrowers
from
refinancing to a) lower their monthly expenses and b) to revitalize the
country."
Shame on me, given the number of times that I have taken my 88-yr old father
to
Costco for a hot dog lunch, that I did not remember that Costco has offered
mortgages
for years both online and with brochures at their retail locations. "Costco
does
offer mortgages! And with some of Lender One's investor partners (Bank of
Internet),
vendor partner (NYLX), and member companies (First Choice Bank, Weststar
Mortgage,
and Sterling Savings Bank) helping out." CostcoApp
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1107786104887&s=8721&e=001lAgH-b
-376LHPfhGcsFcSK7hgPBjtCECQYAkfOr5qwUjTUyAuG7l9O2vVBi33KUKqDcOaY68azG-tCm7lK
mhc6pEbg_TJJ66ETRo3cTCc0wrOOlcJ5w-D1EId47BQtERaWGxlylaglkGi0Cm2vBp8w==].
Lastly, Costco offers mortgages - well sorta. They sell the leads to a small
group
of lenders (including us). We provide rates and fees that are drastically
lower
than what we normally charge, and Costco members get a screaming deal."
Was it Fannie Mae's fault that it didn't catch law firms automatically
signing documents
without looking at them? It appears so, given this new report
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1107786104887&s=8721&e=001lAgH-b
-376IJlzqSW0en9MoL37HkjLibqSNoad4x3Y_6ODu0JBYlX881BYaBOVoueUNwQt78AkQLOyS4vU
7OtIsjttW5BsX5VEr-euGJxrOjJ9iYZ-FpfkTgW4BNOopZ2oRVXkDGF38EvDWl6jj9HzBHcdVHq2
7joym_4FZQAA4B5Hs0LoxmH7IGZQ1R-Q6Erh14m8-j3tvX8Z8hLpVEngxaUshTQYzI4TI-wqjnNF
glJGQt8xU57R5QcaMmCtWxiHyxAUUDQLE=]
from the FHFA.
(Last Thursday the commentary mentioned mortgage-banking movies, and this
reader
wrote in. "I saw the movie Margin Call at The Sundance Film Festival last
year.
It's scheduled to be released October 21st nationwide & is a must see for
anyone
in the industry. Margin Call is a thriller that revolves around the key
people at
an investment bank over a 24-hour period during the early stages of the
financial
crisis. Demi Moore & Kevin Spacey are the key players in an interesting
plot where
a junior analyst realizes that the i-bank holds billions in worthless
subprime notes.
It's well done & not a hokey Wall Street II version of the crisis. See it
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1107786104887&s=8721&e=001lAgH-b
-376I1-5BjXb3eMs0pPhAOEAO-0ewtLAHd4nHzMyrW66avvelqW_kj4sSDyQoW3Vbe2-0ap4OTju
7bVkD4XjfybyQC_jiIF8JhMsu_HuCG1fr_5OL58RD1NwOAQ2MtBz8a3V_6cDp_K2Msvw==])
Did you know that MERS only has a 60% market share? (Why would a company -
retail
- putting a loan into their portfolio pay the $12-or-so registration costs?)
That
bit of public market share trivia aside, MERS also offers training courses,
the
next being October 18 in Atlanta. Instructors will discuss new compliance
requirements,
reconciliation and quality assurance topics, the Corporate Resolution
Management
System, and so on. Online registration and more information are available
at MERS
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1107786104887&s=8721&e=001lAgH-b
-376LH8wSatNAo_2i3W52a3yD8En0ChuaHFcaNHstejSuAa5Lbo4j9WuAwsJ5hS6IdYJXM9aytIR
7KUW3oX6Pt868f6YHduO1yvZY60MHhU1f7dg==].
Seating is limited, and its 75 smackers. PLEASE NOTE: No onsite registration
is
available. "A must-attend event for secondary managers, post-closing,
shipping and
servicing managers, and compliance officers, this workshop is an excellent
opportunity
for anyone who wants to harness the power of MERS and the MERSR System for
their
organization."
The push to extend the temporary loan limits is pretty much over, raising
questions
about the housing industry's clout. The new limits differ by location, but
will
drop to $625,500 in expensive markets such as San Francisco and New York
from the
current $729,750. Lobbyists for real estate agents and mortgage bankers
tried to
convince lawmakers to extend the current limits with no success, especially
among
Republicans incensed about government bailouts. A year ago, when Congress
was controlled
by Democrats, lawmakers extended the loan limits with little discussion. But
this
year the Obama administration let it be known that it supported letting the
current
limits fall and did not change its stance as some Democrats had hoped. Now,
real
estate industry lobbyists are looking toward a spending bill that may be
hashed
out by year-end to enact a one-year extension of the current limits.
The FTC is going after false mortgage modification websites. It is good to
see:
FalseAdvertising
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1107786104887&s=8721&e=001lAgH-b
-376I4e89LbJnPcY8Jr-4CWCjxz0qB-8kq-90xqEBlrFERv2MI6CcDELCTEq1pKu9BFz8Cvbe3qp
iZZacP3tioq7l0KAU0iMqrpxPuDT-aAhQYAR0rgzh-JT3Ij1VGgQCdjO0pA8LJjUwWkeKXrGcqhL
15uwzXEGgNd2kCb1rm1fuCrNEj4MfBHC0hAqj2OZhfLH31jhr5Nh_L0fgfD1Petrti].
With the drop in rate, once again investors are publicizing their
renegotiation
policies. Wells' wholesale, for example, reminds brokers, "When
renegotiating a
rate, the Broker's First website only displays lock periods long enough to
cover
the current expiration. If a 45-day lock price is better than a shorter
term lock
and you want to renegotiate to the 45-day term, you should use the Email
Renegotiation
Form...In improving rate environments, it may be possible to exercise a
one-time
option to renegotiate the terms of the rate lock in order to improve the
rate offered
to the borrower. In certain situations, it may be possible to relock a loan
on the
current market price minus a .500% fee at a lower rate. Renegotiations must
provide
an improvement to the borrower in rate or reduce discount charged by Wells
Fargo.
All benefits must go to the borrower. The new renegotiated lock expiration
date
will be the lesser of the new lock period chosen or the current expiration
date.
Loans must close within the current expiration date or extend at the
borrower's
cost. The pricing and lock period may be subject to additional restrictions
and
current guidelines." For details & restrictions it is best to check Wells'
bulletin.
Across the proverbial investor street at Bank of America, the California
State Teachers
Retirement System (CalSTRS) Home Loan Program sent out an update. "As
announced
on August 18, 2011, the CalSTRS 80/17 program will be discontinued. The last
day
to lock any 80/17 loans will be September 30, 2011. Due to the announcement
on
August 31, 2011, that Bank of America Home Loans intends to sell its
Correspondent
Lending business, the anticipated CalSTRS Home Connection Program will not
be released.
The CalSTRS Conventional Standard Program will be discontinued as well; the
last
day to lock any Conventional Standard loan will also be September
30...CalSTRS
will be working to re-launch the Home Loan Program in the future. Interested
parties
can contact the CalSTRS Home Loan Program Manager at hlp@calstrs.com
There is also a rumor that BofA is suspending FHA/VA streamline
refinancings, but
I have seen nothing in writing.
Yesterday I mentioned that, "GMAC's correspondent clients were shown changes
in
pricing adjustments for 5/1 ARM's of various shapes, sizes, amounts, and
geographic
locations." I failed to mention that GMAC wholesale also had similar changes
- my
apologies.
In terms of economic news, yesterday we learned that Initial jobless claims
dropped
by 9k to 423k for the week ended Sept. 17, as expected, although the
four-week moving
average of new claims, a more reliable indicator of the labor market's
recent performance,
rose by 500 to 421,000. We also saw the FHFA House Price Index Up 0.8
Percent in
July, and the Conference Board Leading Economic Index (LEI) +.3%. It was a
"risk
off" day, with major stock exchanges around the world falling between 4
percent
and 5 percent as global economic slowing and recession fears escalated.
As mentioned above, I think that many in our industry could do with "less
lower
rates and more qualified borrowers and properties." Regardless, the US
10-year note
jumped 1.375 in price down to a yield of 1.72%. MBS prices soared 50 and 47
ticks,
respectively, on 30-year 3.0s and 3.5's, but passing that through onto rate
sheets
will take some time. Today there is no scheduled news to push us around,
just further
trading based on Europe's problems and our economy being in the doldrums.
Stocks
are pointing down, gold is down over $50 an ounce (!), the 10-yr yield is
down
to 1.70%, and MBS prices are a shade better. But watch for rate sheet prices
to
improve further, catching up a little with yesterday.
This clip has been kicking around for quite some time, but is just as
relevant now:
a semi-humorous dissection of the European debt crisis: WhoOwesWhatToWho?
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1107786104887&s=8721&e=001lAgH-b
-376I8Ad0gTW-4sLB7_CQ_0yVMj0j2fGJ1OTeREkhXFA8gMb0Ba1d8pypDgneDwhBjsP2uK2ZxTC
8f7UUk6xhPOALqApmj85AwvOmCvvkpV6XUdPFusfZf2cgBd_oEnb2kPZaBxOahtzz47A==]
If you're interested, visit my twice-a-month blog at the STRATMOR Group web
site
located at www.stratmorgroup.com
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106435366068&s=4179&e=001SVt-lj
bp53436QjxD9vbwURtIPPjV05jEcEKyBN3SjS2forXe0C_foO8RjEV-Uye0N7Z_Sh1il0SRXPx6P
jQauayNXQjni-Hc9Sseu-hhZcR1ujeZyAEpw==]
. The current blog takes a look at the recent news concerning REIT's, and
the possible
tax implications. If you have both the time and inclination, make a comment
on what
I have written, or on other comments so that folks can learn what's going on
out
there from the other readers.
Rob
(Check out
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=xbaftwhab.0.epg7qedab.zy6u9cdab.8
721&ts=S0672&p=http%3A%2F%2Fwww.mortgagenewsdaily.com%2Fchannels%2Fpipelinep
ress%2Fdefault.aspx]
or
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=xbaftwhab.0.v7uif6dab.zy6u9cdab.8
721&ts=S0672&p=http%3A%2F%2Fwww.thebasispoint.com%2Fcategory%2Fdaily-basis]
. For archived commentaries, go to
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=xbaftwhab.0.fpg7qedab.zy6u9cdab.8
721&ts=S0672&p=http%3A%2F%2Fwww.robchrisman.com%2F]
. Copyright 2011 Rob Chrisman. All rights reserved. Occasional paid notices
do
appear. This report or any portion hereof may not be reprinted, sold or
redistributed
without the written consent of Rob Chrisman.)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
~~~~
Join My Mailing List
[http://visitor.r20.constantcontact.com/email.jsp?m=1102827910937]
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
~~~~
Forward email
Instant removal with SafeUnsubscribe(TM)
TmggCt&t=001uq6nw-ovcPT1hP_hd1crjg%3D%3D&llr=zy6u9cdab
Privacy Policy:
Online Marketing by
Constant Contact(R)
Chrisman Inc. | 326 Mission Ave. | San Rafael | CA | 94901
No comments:
Post a Comment